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Commercial awareness is the ability to understand the context in which organisations operate, including their clients, customers and suppliers, as well as the internal and external challenges they currently face and those that may arise in the future.

For more information about building commercial awareness, check out LawCareers.Net’s Commercial Awareness hub, sponsored by Mayer Brown International LLP.

Breaking down the concept of commercial awareness

Internal challenges can include factors such as financial resources and organisational structure, while external challenges encompass technological advancements and political stability, which can significantly affect market conditions and the overall economic environment.

A notable example of how external challenges impacted nearly all organisations was the Covid-19 pandemic. This period disrupted operations across the board, leading to reduced production and significant job losses – approximately 1.3 million people lost their jobs in the UK between March 2020 and January 2021 due to this pandemic. Financial instability and health concerns worldwide were among the many issues that linked to this crisis. Lawyers must use their commercial awareness and ensure that this knowledge is implemented in the advice they give, putting into perspective how their legal counsel will affect the client's business. In summary, commercial awareness can be described as staying informed about world trends – social, political, and economic – and understanding how they impact businesses.

Commercial awareness: a must-have skill for success

Commercial awareness is a game-changer for lawyers, especially when working with business clients. It’s not just about knowing the law, it’s about understanding how a client’s business ticks – from their internal operations to the broader market they operate in, as well as the market trends, competitor moves and shifting regulations that can impact their industry and related sectors. This deeper understanding allows lawyers to provide advice that’s truly aligned with their clients' needs and goals. Demonstrating knowledge of a client’s market enables lawyers to offer tailored, effective advice, helping clients navigate their legal challenges more successfully. It also helps to build stronger relationships with clients and establish trust, positioning the lawyer as a true partner in their business journey.

Commercial awareness is essential for early-career applicants in the legal industry because it prepares you for assessment centres, while also giving you a grasp on the matters you may deal with throughout your career. It provides foundational and contextual information that’ll allow you to excel in interviews and other exercises commercial law firms will put you through. For example, Ashurst LLP has previously conducted a written exercise where candidates needed to read several articles and formulate an argument to present their findings on whether a wind farm project should go ahead. While this tests other skills, like attention to detail and the ability to formulate arguments under timed conditions, commercial awareness is a key skill that’ll come in handy for this exercise. Demonstrating your commercial awareness shows law firms that you genuinely care about their clients and the business side of law, which is crucial since they invest heavily in training new solicitors. Plus, you’ll likely face the classic “why commercial law?” question in interviews, so having solid insights will help you shine.

Here is a tip: do not just pick the first topic that pops up in a Google search! Instead, focus on an area that truly interests you. Whether it’s the latest trends in technology law or developments in environmental regulations, choosing something you’re passionate about will make your responses more compelling and unique. This will not only help you stand out in interviews but also allow you to engage with confidence and enthusiasm.

Three proven ways to enhance your commercial awareness

1) Gain practical work experience

Gaining work experience – whether it’s in the legal field or a completely different industry – can seriously boost your commercial awareness. Taking on part-time jobs, internships or even volunteering can give you a first hand look at how businesses operate, from understanding their clients and the products they offer to getting the scoop on market competition and profitability.

Working in a shop or restaurant where you interact directly with customers and management, can be especially enlightening. For example, a friend of mine who worked at Starbucks noticed that customers were getting frustrated with the slow service, which could really hurt sales in the long run. She took the initiative to suggest a new ordering system, which helped speed things up. Guess what? Sales soared as customers were happier and getting their drinks faster. So, dive into any work experience you can – it’s a fantastic way to sharpen your commercial skills!

2) Stay updated and read the news

Make it a habit to dive into the business section of top newspapers like The Financial Times, The Economist, or free options like The Guardian. It’s the best way to stay on top of the latest deals, disputes and policy changes. If you’re looking for an easy starting point, check out LCN’s weekly commercial news round-up and Commercial Questions, which are explainers on key issues written by lawyers – perfect for breaking down complex topics!

Perhaps you prefer to listen to your news? Check out this LCN Says to find out about podcasts you should follow to boost your commercial awareness.

3) Attend law firm events

Going to firm open days and events is a great way to get an inside look at what a firm is really working on and how they tackle big industry trends. It’s like getting a front-row seat to the commercial world from people who are right in the thick of it. Plus, some firms host panel discussions or talks focused on specific topics or sectors, giving you insights you would not always find in the headlines. For example, when I attended Pinsent Masons LLP's insight event, I got a firsthand look at how they are navigating AI as a game-changing trend across industries. It was not just about AI's general impact on the market – it was also about how Pinsent Masons is positioning itself in this space, which is knowledge that will definitely help me with future applications. Overall, this experience significantly enhanced my commercial awareness.

Read this Feature for five tips for preparing for law firm open days, presentations and insight schemes.